Fitch revises Lloyd’s to negative

Fitch Ratings said it revised Lloyd's of London's and Lloyd's Insurance Co. (China) Ltd.'s outlook to negative from stable and affirmed the insurer financial strength ratings at AA-.

The agency also revised the outlook for the Society of Lloyds to negative from stable and affirmed the long-term issuer default rating at A+. The subordinated bonds were affirmed at A-.

Fitch said the outlook revisions are due to deterioration in underwriting performance, coupled with increasing exposure to catastrophe risk in the context of continuing pressure on both risk-adjusted premium rates and expense ratios at Lloyd's. The Fitch-calculated combined ratio of 98% was a significant deterioration from recent performance, driven by a return to more normalized levels of catastrophe activity in the market as well as increasing expenses and falling risk-adjusted premium rates.

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